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Fighting Income Tax Evasion with Positive Rewards

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  • Cécile Bazart

    (University of Montpellier I, Montpellier, France)

  • Michael Pickhardt

    ()
    (University of Muenster, Muenster, Germany)

Abstract

This article provides experimental evidence regarding the influence of positive rewards on income tax evasion behavior. In particular, the authors experimentally test the impact of positive rewards in the form of individual lottery winnings for fully compliant taxpayers. Among other things, the authors find that these positive rewards lead to a higher rate of tax compliance. Moreover, there are two gender effects. Males not only evade taxes to a much higher extent than females they also show a stronger positive response to the lottery scheme. This allows us to draw some interesting policy recommendations on the efficient use of rewards as a complement of deterrence policies for fighting tax evasion.

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Bibliographic Info

Article provided by in its journal Public Finance Review.

Volume (Year): 39 (2011)
Issue (Month): 1 (January)
Pages: 124-149

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Handle: RePEc:sae:pubfin:v:39:y:2011:i:1:p:124-149

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Related research

Keywords: tax evasion; tax compliance; lottery; rewards; public goods;

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Cited by:
  1. Sascha Hokamp & Michael Pickhardt, . "Pareto-optimality in Linear Public Goods Games," Working Papers 201171, Institute of Spatial and Housing Economics, Munster Universitary.
  2. Hokamp, Sascha, 2014. "Dynamics of tax evasion with back auditing, social norm updating, and public goods provision – An agent-based simulation," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 187-199.
  3. Cécile Bazart & Aurélie Bonein, 2012. "Reciprocal Relationships in Tax Compliance Decisions," Working Papers 12-35, LAMETA, Universtiy of Montpellier, revised Dec 2012.
  4. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.

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